As market participants are not ruling out the possibility that the US GDP ...may provide dollar-supportive evidence, they prefer to wait for the outcome.
As long as concerns over possible interest rate rises are out there, the dollar is likely to be pressured by the unwinding of yen-carry trade positions.
As market participants are not ruling out the possibility that the US GDP ... may provide dollar-supportive evidence, they prefer to wait for the outcome.
There is a strong wait-and-see mode ahead of key economic events in the US, including tomorrow's GDP release and next week's FOMC meeting. This weighed on the euro despite a supportive strong German IFO survey.
I think the market has almost fully priced in now the likelihood of a shift in policy either in March or April and so there is almost no room for the yen to advance any further on this lead.
The dollar's bearish (weaker) trend is expected to continue unless the GDP figures are significantly stronger (than exported) or the market finds strong signals for further rate hikes in the Fed statement.
The market has largely factored in another US rate hike this month. The focus is to find out in the accompanying statement whether the Fed will raise interest rates further.
The market is largely of the view that the Fed will raise interest rates next month after the statement from the January meeting showing flexibility in raising rates while tracking economic indicators.
As the market has largely anticipated an end to the current monetary policy soon, buying of the yen will not last.
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